Nix $1.7B Developer Tax Breaks, Leaders Say In Brooklyn

BROOKLYN, NY — City Comptroller Brad Lander and a group of local leaders gathered in front of a Brooklyn luxury development Wednesday and called on Albany to end the controversial property tax break program known as 421-a, citing the need for a broader property tax fix that generates more deeply affordable housing.

"The program is indefensible. It is a huge giveaway for developers for just a tiny handful of actually affordable units," said Lander, pointing to a report concurrently released by his office, which found that the vast majority of New Yorkers cannot afford most of the so-called affordable units created since 2017 under the $1.7-billion-a-year program.

"When we say that this is New York City's most unaffordable tax break the data backs it up," he said in Brooklyn, noting that developers responsible for the building behind him received tax abatements for adding income-restricted units that cost — at minimum — $2,523 for a studio (which anyone making up to $108,680 per year can apply for).

Lander was joined Wednesday by City Council Members Tiffany Cabán and Pierina Sanchez, who are among a progressive contingent urging state lawmakers to let 421-a expire in June, calling on them to instead create structural changes to the property tax system by the end of the year (a resolution which Cabán and Sanchez also introduced in the Council).

This proposal, however, breaks with Governor Kathy Hochul, who suggested reforming 421-a into a new tax break known as 485-w — a move recently backed by Mayor Eric Adams and groups like the Citizens Budget Commission, which argue that much-needed housing development will slow if 421-a lapses (a point that Lander disagrees with in his report).

Hochul pitched 485-w as a major reform, but most experts have said that the program is not a significant departure from 421-a, save from a section that would make units more deeply affordable by limiting them to people making 90 percent or less of the area median income (people making 130 percent AMI can currently apply for some so-called affordable units).

Advocates at Wednesday's news conference, though, went a step further, calling 485-w unacceptable.

"421-a by any other name is a scam and it's a scam that developers are racketeering off of," said Assembly Member Phara Souffrant Forrest, adding that the tax break benefits developers' bottom line over community investment, especially in communities of color.

"When I compare this new glass building here and the NYCHA developments right that way we see that there's a lack of investment. I know we can do better to address the inequality," said the lawmaker, gesturing towards Fort Greene's Whitman Houses, which are within her district.

The coalition against 421-a is continuing to grow, as evidenced by Wednesday's conference, and recent opposition to Hochul's plan by groups like the New York City District Council of Carpenters.

Other building trade unions, though, haven't weighed in yet, and their support could help determine what happens with the program, insiders told The City.

Real estate interests, meanwhile, continue to say they are confident that the program will be renewed.

"We must seize this opportunity right now — regardless of long-term policy ideas, no matter how well-intended," said James Whelan, president of the Real Estate Board of New York, according to The City. "We are confident that the Governor’s proposal will be included in her final budget later this month."